IT stocks fall on sharp gains in the rupee

Business

oi-Sunil

By Sunil Fernandes

Published: Monday, May 12, 2014, 10:22 [IST]

IT stocks fell in trade today on sharp gains recorded in the rupee. The fall in IT shares came despite the Sensex rallying 1.37 per cent in trade.

Among the notable losers were TCS which fell 1.4 per cent, Wipro dropped 1.5 per cent and HCL Tech was down 0.02 per cent. Infosys was little changed over Friday's close.

Today's losses was largely on the back of sharp appreciation in the rupee which rallied to 59.56 against the dollar from 60.04 to the dollar.

The sharp gains recorded in the rupee was largely on hopes that the Narendra Modi led NDA would form the next government at the Centre.

Analysts believe that the rupee could breach the 58 levels should the NDA win closer to 260 seats.

Should the rupee continue to appreciate it is not good news for IT companies which get bulk of their revenues in dollars. Sharp gains in the rupee is likely to put margins under pressure and hit rupee revenues.

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